Concept explainers
a
Introduction:
Intercompany transfers: When the intercompany transfer of asset occurs, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by the acquiring company. When the asset is transferred at book value no special adjustments are needed. But when the asset is transferred at more or less than the book value, the unrealized gain or loss is deferred until the asset is sold to an unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.
The consolidation entries required to prepare a three-part consolidated worksheet at December 31, 20X9
b
Introduction:
Intercompany transfers: When the intercompany transfer of asset occurs, the parent company must make adjustments in preparing consolidated financial statements as long as the asset is held by the acquiring company. When the asset is transferred at book value no special adjustments are needed. But when the asset is transferred at more or less than the book value, the unrealized gain or loss is deferred until the asset is sold to an unrelated party. Moreover in the consolidation, the gain or loss will be eliminated.
The three part consolidation worksheet for December 31, 20X9.
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Chapter 7 Solutions
Advanced Financial Accounting
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